EDMONTON JOURNAL edmontonjournal.com WEDNESDAY, JANUARY 21, 2015 B7 UPCOMING: Join our LinkedIn group: Capital Ideas at the Edmonton Journal. Follow us on Twitter: @capitalideasyeg Julie Witten-Land, owner of Salted Studio (saltedstudio.com), advises entrepreneurs to let the market dictate price. “If your product is priced too high in competition with other similar products, the market and people will let you know. Of course you have to calculate your expenses and all costs that go into making the product, then multiply that by a 2.5- to three-per-cent markup.” PHOTO SUPPLIED BY: JULIE WITTEN-LAND “First, ensure that your margin is low enough that your customers will gain significant value by purchasing your product. If the margin is too high, the perceived gain in value to your customer will diminish. Secondly, your margin needs to allow you to cover business overheads, but some companies use the philosophy of ‘whatever the market will bear.’ I disagree with that idea and prefer to keep margins as low as I can to promote increased business volume.” — Jim Ackney, dealer at Amsoil— 4syntheticoil.com “Is your product or service unique? If so, you will be more successful following the higher- price, lower-volume model. If there are multiple competitors in your marketplace, you will be constrained in your pricing, and will be more successful with a lower-price, higher-volume model. You should also take care to segregate your costs to fixed and variable elements. Always set your sell price higher than your variable elements, or you won’t remain in business long.” — Richard Hewson, founder of Richard Hewson CFO Consulting “As a photographer, pricing can feel a bit nebulous … I base my pricing on value to the client and on industry standards. Pricing also reflects the time, equipment costs and education photographers require to do their job well.” — Rebecca Lippiatt, owner of Rebecca Lippiatt Photography — rebeccalippiatt.com “When it comes to handmade products, a good equation to follow is time plus materials equals cost. From there, double your cost to establish your wholesale price, and double your wholesale price to determine your retail price. Customer response will suggest whether you need to lower or increase your prices, but following this formula is a good place to start.” — Erin Mooney, co-founder of Made Urban — madeurban.com “I recommend the ‘five knows’ when pricing a product or service: Know your customer; know your costs; know your revenue target; know your competition; and know where the market is headed. With that information, you can determine the right price.” — Laura M. Schuler, general counsel at Schuler Law Group “A fundamental tenet of pricing is that you need to cover your costs and then factor in a profit. You need to know what your monthly overhead costs are going to be, from rent, utilities, supplies, pay, etc. The cost of your product or service must cover these, plus provide you with a profit so that you can grow your business.” — Stacey Hogbin, owner of Wevive Fitness — wevivefitness.com “Research your market, and aim price with your future aims in mind. Your product or service will improve with time, and it’s better to rise up to that challenge than to undercharge years after you’ve surpassed its formerly set value.” — Douglas Dollars, project manager of FORT COZY — fortcozy.co “Before you determine price, consider the value of your product or service. Is my product or service offered somewhere else? Do I offer anything different or of value that would make my offering better? If price is all you can offer, someone else determines your value. If value is what you can offer, then price will be that last thing that is noticed to most clients.” — Daniel Dromarsky, capital partner at Enviro- Plus Business Services Corp. — enviro-plus.ca “When setting prices, you must consider your costs to provide the service, competitor pricing, and the value your services are providing to your clients. The key is to ensure that you are maximizing the company’s profits, which does not necessarily correlate to maximizing the company’s gross revenue.” — Debbie Engel, owner of Debbie L Engel Professional Corporation — depc.ca “Without a doubt, one of the most challenging tasks for business owners is setting an appropriate price for their product or service. As a professional speaker and corporate trainer, I began by researching my competition and comparing their fees and expertise to my own. Pricing a service can be a little more involved than pricing a product; my advice is not to sell yourself short just to get customers through the door. Perception is everything.” — Paula Goebel, founder of Goebel Communications Group — paulagoebel.com “First, you need to make sure you are very clear on what your product or service is, then you have to see what the competition has priced a similar product or service. It’s as simple as checking lists online, making some phone calls or checking it out in person. Don’t forget to talk to friends and family to get their reactions. Another option which is more costly but can fit into your marketing survey is holding a focus group to get reactions from the public.” — Gail Hall, owner of Seasoned Solutions Cooking School and Culinary Tours — seasonedsolutions.ca “Art is something that cannot be priced by its competition; there is no industry standard per se, but don’t undervalue your originals. If you want to sell affordable artwork, then make prints of your work so those who cannot afford the original can enjoy your talents. Art is priceless, so the real question we need to ask ourselves is what is our time worth?” — Pardee Badyal, CEO and founder of Art Trends — arttrends.ca “As a service-based business, understanding the amount of time we spend delivering our product is key for setting prices. We also base pricing on demand and what the market is saying. If our calendar is booked 12 months in advance, that tells us that we can and should raise our prices.” — Jennifer Bergman, president of Jennifer Bergman Weddings — jenniferbergmanweddings.com “Pricing our service requires knowing the market and our competition. After being in business for a couple years, some key indicators of whether pricing is appropriate include client retention and feedback. In the unique business that I own, pricing can be difficult until clients realize the value that they receive for the quality and professionalism of our services. It is important to remember to never sell yourself short.” — Keltie Brisson, co-owner of Rehab and Retreat — rehabandretreat.com “The first thing to do is your research. One thing to find out is what your competition is charging for their products and services, and compare them with yours. Once you’ve established what the market can withstand, you must know who your customer is and provide them with value. It can get pretty tricky to not over- or undercharge. Listen to what your customers want and give it to them, keeping in mind your bottom line and profit margins. Pricing may be one of the hardest things in business to master.” — Dorothy Briggs, owner and publisher of Womanition Magazine — womanition.com BUSINESS OWNERS HELPING BUSINESS OWNERS SIGN UP at capitalideasedmonton.com COMMUNITY QUESTION: International Winter Cities Shake- Up Conference A conference for people who live in winter cities and want to improve their community’s quality of life year-round Where: Shaw Conference Centre (9797 Jasper Ave.) Admission: $75 to $560. Tickets at wintercitiesconference.com Workplace Wellness Bootcamp A full-day workshop focusing on challenges, trends and solutions for workplace wellness Where: Commonwealth Community Recreation Cen- tre (11000 Stadium Rd.) When: 8:30 a.m. to 4 p.m. Admission: $150. Tickets at wellnessbootcamp.ca Learn from Alberta’s Best Alberta Women Entrepreneurs’ full-day program for entrepreneurs who want to take their businesses to the next level Where: Shaw Conference Centre (9797 Jasper Ave.) When: 8 a.m. to 4 p.m. Admission: $135. Tickets at aweinspiringentrepreneurs.com Alberta’s Best — Nominee Reception An event to honour AWE’s 2015 Celebration of Achievement Award nominees Where: Shaw Conference Centre (9797 Jasper Ave.) When: 4:30 p.m. to 6:30 p.m. Admission: $60 to $75. Tickets at aweinspiringentrepreneurs.com JAN JAN FEB FEB 28-30 29 11 11 JOIN US! CAPITAL IDEAS ca pitalideasedmonton.com PROJECT LEADER: KAREN UNLAND, 780-429-5260; [email protected] Business owners share tips for establishing your price point For more great events, visit capitalideasedmonton.com/edmontonevents. How do you know how to price your product or service? This question was posed by Lauren Sergy of Up Front Communication (laurensergy.com) as part of our Community Question series. To submit a business question of your own, visit capitalideasedmonton.com/ask. Getting the word out about your business is key, which is why Wellington Holbrook, executive vice-president of ATB Business, is curious to hear from you: What have you done to build brand awareness? You can answer the question in two ways: • Open today’s Capital Ideas email if you’re a member, or • Visit capitalideasedmonton.com We’ll publish the best answers, along with your busi- ness name and website address, on Jan. 28. For more great information on what business owners in Alberta think, visit atb.com/businessbeat. CAPITAL QUESTION: What have you done to build brand awareness?
Tips for pricing your product or service
Apr 07, 2016
Capital Ideas members share how they determined their price points. Originally published in the Edmonton Journal on Wednesday, Jan. 21, 2015.
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E D M O N T O N J O U R NA L e d m o n t o n j o u r n a l . c o m W E D N E s DAy, J A N UA R y 2 1 , 2 0 1 5 B7
UPCOMING:
Join our LinkedIn group: Capital Ideas at the Edmonton Journal. Follow us on Twitter: @capitalideasyeg
Julie Witten-Land, owner of Salted Studio (saltedstudio.com), advises entrepreneurs to let the market dictate price. “If your product is priced too high in competition with other similar products, the market and people will let you know. Of course you have to calculate your expenses and all costs that go into making the product, then multiply that by a 2.5- to three-per-cent markup.”PHOTO SUPPLIED BY: JULIE WITTEN-LAND
“First, ensure that your margin is low enough that your customers will gain significant value by purchasing your product. If the margin is too high, the perceived gain in value to your customer will diminish. Secondly, your margin needs to allow you to cover business overheads, but some companies use the philosophy of ‘whatever the market will bear.’ I disagree with that idea and prefer to keep margins as low as I can to promote increased business volume.”— Jim Ackney, dealer at Amsoil— 4syntheticoil.com
“Is your product or service unique? If so, you will be more successful following the higher-price, lower-volume model. If there are multiple competitors in your marketplace, you will be constrained in your pricing, and will be more successful with a lower-price, higher-volume model. You should also take care to segregate your costs to fixed and variable elements. Always set your sell price higher than your variable elements, or you won’t remain in business long.”— Richard Hewson, founder of Richard Hewson CFO Consulting
“As a photographer, pricing can feel a bit nebulous … I base my pricing on value to the client and on industry standards. Pricing also reflects the time, equipment costs and education photographers require to do their job well.”— Rebecca Lippiatt, owner of Rebecca Lippiatt Photography — rebeccalippiatt.com
“When it comes to handmade products, a good equation to follow is time plus materials equals cost. From there, double your cost to establish your wholesale price, and double your wholesale price to determine your retail price. Customer response will suggest whether you need to lower or increase your prices, but following this formula is a good place to start.”— Erin Mooney, co-founder of Made Urban — madeurban.com
“I recommend the ‘five knows’ when pricing a product or service: Know your customer; know your costs; know your revenue target; know your competition; and know where the market is headed. With that information, you can determine the right price.”— Laura M. Schuler, general counsel at Schuler Law Group
“A fundamental tenet of pricing is that you need to cover your costs and then factor in a profit. You need to know what your monthly overhead costs are going to be, from rent, utilities, supplies, pay, etc. The cost of your product or service must cover these, plus provide you with a profit so that you can grow your business.”— Stacey Hogbin, owner of Wevive Fitness — wevivefitness.com
“Research your market, and aim price with your future aims in mind. Your product or service will improve with time, and it’s better to rise up to that challenge than to undercharge years after you’ve surpassed its formerly set value.”— Douglas Dollars, project manager of FORT COZY — fortcozy.co
“Before you determine price, consider the value of your product or service. Is my product or service offered somewhere else? Do I offer anything different or of value that would make my offering better? If price is all you can offer, someone else determines your value. If value is what you can offer, then price will be that last thing that is noticed to most clients.”— Daniel Dromarsky, capital partner at Enviro-Plus Business Services Corp. — enviro-plus.ca
“When setting prices, you must consider your costs to provide the service, competitor pricing, and the value your services are providing to your clients. The key is to ensure that you are maximizing the company’s profits, which does not necessarily correlate to maximizing the company’s gross revenue.”— Debbie Engel, owner of Debbie L Engel Professional Corporation — depc.ca
“Without a doubt, one of the most challenging tasks for business owners is setting an appropriate price for their product or service. As a professional speaker and corporate trainer, I began by researching my competition and comparing their fees and expertise to my own. Pricing a service can be a little more involved than pricing a product; my advice is not to sell yourself short just to get customers through the door. Perception is everything.”— Paula Goebel, founder of Goebel Communications Group — paulagoebel.com
“First, you need to make sure you are very clear on what your product or service is, then you have to see what the competition has priced a similar product or service. It’s as simple as checking lists online, making some phone calls or checking it out in person. Don’t forget to talk to friends and family to get their reactions. Another option which is more costly but can fit into your marketing survey is holding a focus group to get reactions from the public.”— Gail Hall, owner of Seasoned Solutions Cooking School and Culinary Tours — seasonedsolutions.ca
“Art is something that cannot be priced by its competition; there is no industry standard per se, but don’t undervalue your originals. If you want to sell affordable artwork, then make prints of your work so those who cannot afford the original can enjoy your talents. Art is priceless, so the real question we need to ask ourselves is what is our time worth?”— Pardee Badyal, CEO and founder of Art Trends — arttrends.ca
“As a service-based business, understanding the amount of time we spend delivering our product is key for setting prices. We also base pricing on demand and what the market is saying. If our calendar is booked 12 months in advance, that tells us that we can and should raise our prices.”— Jennifer Bergman, president of Jennifer Bergman Weddings — jenniferbergmanweddings.com
“Pricing our service requires knowing the market and our competition. After being in business for a couple years, some key indicators of whether pricing is appropriate include client retention and feedback. In the unique business that I own, pricing can be difficult until clients realize the value that they receive for the quality and professionalism of our services. It is important to remember to never sell yourself short.”— Keltie Brisson, co-owner of Rehab and Retreat — rehabandretreat.com
“The first thing to do is your research. One thing to find out is what your competition is charging for their products and services, and compare them with yours. Once you’ve established what the market can withstand, you must know who your customer is and provide them with value. It can get pretty tricky to not over- or undercharge. Listen to what your customers want and give it to them, keeping in mind your bottom line and profit margins. Pricing may be one of the hardest things in business to master.”— Dorothy Briggs, owner and publisher of Womanition Magazine — womanition.com
B U S I N E S S OW N E R S H E L P I N G B U S I N E S S OW N E R S
SIGN UP atcapitalideasedmonton.com
COMMUNITY QUESTION:International Winter Cities Shake-Up ConferenceA conference for people who live in winter cities and want to improve their community’s quality of life year-round Where: Shaw Conference Centre (9797 Jasper Ave.)Admission: $75 to $560. Tickets at wintercitiesconference.com
Workplace Wellness BootcampA full-day workshop focusing on challenges, trends and solutions for workplace wellnessWhere: Commonwealth Community Recreation Cen-tre (11000 Stadium Rd.)When: 8:30 a.m. to 4 p.m.Admission: $150. Tickets at wellnessbootcamp.ca
Learn from Alberta’s BestAlberta Women Entrepreneurs’ full-day program for entrepreneurs who want to take their businesses to the next levelWhere: Shaw Conference Centre (9797 Jasper Ave.)When: 8 a.m. to 4 p.m.Admission: $135. Tickets at aweinspiringentrepreneurs.com
Alberta’s Best — Nominee ReceptionAn event to honour AWE’s 2015 Celebration of Achievement Award nominees Where: Shaw Conference Centre (9797 Jasper Ave.)When: 4:30 p.m. to 6:30 p.m.Admission: $60 to $75. Tickets at aweinspiringentrepreneurs.com
JAN
JAN
FEB
FEB
28-30
29
11
11
JOIN US!
CAPITAL IDEAScapi ta l id easedmonton .com P R O J E C T L E A D E R : K A R E N U N L A N D, 7 8 0 - 4 2 9 - 5 2 6 0; k a r e n @ c a p i t a l i d e a s e d m o n t o n . c o m
CAPITAL IDEASBusiness owners share tips for establishing your price point
For more great events, visit capitalideasedmonton.com/edmontonevents.
How do you know how to price your product or service?
This question was posed by Lauren Sergy of Up Front Communication (laurensergy.com) as part of our Community Question series. To submit a business question of your own, visit capitalideasedmonton.com/ask.
Getting the word out about your business is key, which is why Wellington Holbrook, executive vice-president of ATB Business, is curious to hear from you:
What have you done to build brand awareness?
You can answer the question in two ways:
• Open today’s Capital Ideas email if you’re a member, or• Visit capitalideasedmonton.comWe’ll publish the best answers, along with your busi-
ness name and website address, on Jan. 28. For more great information on what business owners in Alberta think, visit atb.com/businessbeat.
CAPITAL QUESTION: What have you done to build brand awareness?
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